2018 Full Year Results Presentation - OCBC Bank · Disclaimer: This presentation should be read as...
Transcript of 2018 Full Year Results Presentation - OCBC Bank · Disclaimer: This presentation should be read as...
Disclaimer: This presentation should be read as an overview of OCBC’s current business activities and operating
environment which may contain statements relating to OCBC’s growth strategy and future business
aspirations. These statements involve risks and uncertainties and should not be solely relied upon
by investors or potential investors when making an investment decision. OCBC Bank accepts no
liability whatsoever with respect to the use of this document or its content.
2018 Full Year Results
Presentation22 February 2019
Agenda
2
Results Overview
FY18 & 4Q18 Group Performance Trends
Appendix: Performance of Major Subsidiaries
- Great Eastern Holdings
- OCBC Wing Hang
- OCBC Malaysia
- Bank OCBC NISP
Note: - Certain comparative figures have been restated to conform with the current period’s presentation.
- Amounts less than S$0.5m are shown as “0”;
- “nm” denotes not meaningful;
- “na” denotes not applicable;
- Figures may not sum to stated totals because of rounding.
NSFR: 109% 3/
Allowances: S$0.29b; -57%
(FY17 : S$0.67b)
3
Record full year net profit of S$4.49b, driven by 22% increase in profit from banking operations;
2018 proposed final dividend increased 15% from the interim dividend to 23 cents per share
FY18 Highlights
Delivering consistent and sustainable growth
➢ Net profit from banking operations grew 22% YoY to S$3.89b
➢ Net interest income up 9% YoY from loan growth and 5bps
expansion in NIM to 1.70%
➢ Wealth management business comprised 29% of total Group
income
• Private banking AUM rose 3% YoY to US$102b, driven
by net positive money inflows
• Great Eastern’s embedded value grew 0.4% to
S$13.44b
➢ Asset quality continued to be sound, NPL ratio stable YoY at
1.5% and total credit costs at 11bps
➢ Customer loans grew 9% YoY and deposits were up 4%
➢ Strong funding and liquidity position maintained
➢ CET1 CAR rose to 14.0% from 13.1% a year ago
➢ Proposed final dividend per share at 23 cents, bringing FY18
total dividend to 43 cents, up from 37 cents in FY17
Higher Returns
Year-on-Year
Sustained
Growth Across
Diversified
Franchise
Strong
Liquidity,
Funding and
Capital
Position
Net Interest Income: S$5.89b; +9%
(FY17 : S$5.42b)
Non-interest Income: S$3.81b; -7%
(FY17 1/ : S$4.10b)
NPL ratio: 1.5%
(Dec 17: 1.5%)
Operating Expenses: S$4.21b; +4%
(FY17 1/ : S$4.04b)
ROA: 1.2%
(FY17 1/ : 1.1%)
Customer Loans: S$258b; +9%
(Dec 17 : S$237b)
Customer Deposits: S$295b; +4%
(Dec 17 : S$284b)
CET1 ratio: 14.0%
(Dec 17 : 13.1% 2/)
Leverage ratio: 7.2%
(Dec 17 : 7.3%)
All-currency LCR: 156%
(4Q17 : 159%)
Group performance
1/ Figures for FY17 were restated in accordance with SFRS(I) and change in accounting policy for Great Eastern Holdings (“GEH”).
2/ Based on Basel III rules which came into full effect from 1 January 2018.
3/ Net stable funding ratio is computed based on MAS Notice 652 effective 1 January 2018.
Resilient Asset
Quality
Net Profit
S$4.49b
+11%
ROE 11.5%(FY17 1/ : 11.0%)
FY18 FY17 YoY
S$m S$m +/(-)%
Net interest income 5,890 5,423 9
Non-interest income 3,811 4,105 (7)
Total income 9,701 9,528 2
Operating expenses (4,214) (4,043) 4
Operating profit 5,487 5,485 –
Amortisation of intangibles (102) (104) (2)
Allowances (288) (671) (57)
Associates 455 389 17
Tax & non-controlling interests (“NCI”) (1,060) (1,054) 1
Net profit 4,492 4,045 11
OCBC Group
FY18 Group PerformanceFull year net profit grew 11% YoY to S$4.49b
Group performance
4
Note: Figures for FY17 were restated in accordance with SFRS(I) and change in accounting policy for GEH.
FY18 FY17 YoYS$m S$m +/(-)%
Net interest income 5,811 5,333 9
Non-interest income 2,818 2,715 4
Total income 8,629 8,048 7
Operating expenses (3,994) (3,771) 6
Operating profit 4,635 4,278 8
Allowances (293) (655) (55)
Associates 466 402 16
Amortisation, tax & NCI (920) (843) 9
Net profit from banking operations 3,888 3,182 22
GEH net profit contribution 604 863 (30)
OCBC Group net profit 4,492 4,045 11
Banking Operations
FY18 Banking Operations PerformanceBanking Operations’ net profit grew 22% YoY to a record S$3.89b
Banking Ops performance
5
Note: Figures for FY17 were restated in accordance with SFRS(I) and change in accounting policy for GEH.
4Q18 4Q17 YoY 3Q18 QoQ
S$m S$m +/(-)% S$m +/(-)%
Net interest income 1,520 1,424 7 1,505 1
Non-interest income 830 1,214 (32) 1,039 (20)
Total income 2,350 2,638 (11) 2,544 (8)
Operating expenses (1,078) (1,075) – (1,069) 1
Operating profit 1,272 1,563 (19) 1,475 (14)
Amortisation of intangibles (26) (26) 1 (26) –
Allowances (205) (178) 14 (49) 311
Associates 85 28 197 134 (37)
Tax & NCI (200) (353) (43) (289) (31)
Net profit 926 1,034 (11) 1,245 (26)
OCBC Group
4Q18 Group PerformanceNet profit for the fourth quarter at S$926m
Group performance
6
Note: Figures for 4Q17 were restated in accordance with SFRS(I) and change in accounting policy for GEH.
4Q18 4Q17 YoY 3Q18 QoQS$m S$m +/(-)% S$m +/(-)%
Net interest income 1,499 1,403 7 1,485 1
Non-interest income 639 648 (1) 744 (14)
Total income 2,138 2,051 4 2,229 (4)
Operating expenses (1,016) (985) 3 (1,003) 1
Operating profit 1,122 1,067 5 1,226 (8)
Allowances (205) (176) 16 (52) 295
Associates 86 31 173 138 (38)
Amortisation, tax & NCI (186) (251) (26) (243) (23)
Net profit from banking operations 817 671 22 1,069 (24)
GEH net profit contribution 109 363 (70) 176 (38)
OCBC Group net profit 926 1,034 (11) 1,245 (26)
Banking Operations
4Q18 Banking Operations PerformanceNet profit for Banking Operations rose 22% YoY to S$817m
Banking Ops performance
7
Note: Figures for 4Q17 were restated in accordance with SFRS(I) and change in accounting policy for GEH.
Agenda
8
Results Overview
FY18 & 4Q18 Group Performance Trends
Appendix: Performance of Major Subsidiaries
- Great Eastern Holdings
- OCBC Wing Hang
- OCBC Malaysia
- Bank OCBC NISP
54%
14%
9%
19%
4%
Singapore
Malaysia
Indonesia
Greater China
Others
54%
16%
6%
5%
19%
37%
24%
9%
22%
8%
Global Corporate / Investment
Banking
Global Consumer /
Private Banking
Global Treasury
and Markets
Insurance
OCBC Wing Hang
25%
9%
15%
41%
10%
Performance by business and geographyEarnings well-diversified across key business segments and geographies
9
Note: Figures for FY17 were restated in accordance with SFRS(I) and change in accounting policy for GEH.
1/ Operating profit before allowances and amortisation. Excludes the Others segment, which comprises
mainly property holding, investment holding and items not attributable to the business segments.
2/ Pre-tax profit for Indonesia was 21% lower than a year ago mainly due to the write-back of portfolio
allowances in FY17. PBT before portfolio allowances fell 9% YoY.
FY18 Operating Profit
by Business1/
FY18 Profit before Tax
by Geography
Earnings
FY18
FY17
FY18
FY17
Singapore
S$2,975m
YoY: +8%
Malaysia
S$913m
YoY: +29%
Indonesia
S$354m
YoY: -21%
Greater China
S$1,037m
YoY: +6%
Others
S$273m
YoY: +32%
2/
1.67%1.65%
1.70%
1.62%
1.65% 1.66% 1.67% 1.67% 1.67%
1.72% 1.72%
Net interest incomeFY18 net interest income rose 9% YoY, driven by loan growth and higher NIM.
NIM up 5bps to 1.70% on the back of higher NIMs in Singapore, Malaysia and Greater
China
10
Net interest income (S$m)
Net interest margin(“NIM”)
Net interest income
1,272
1,3451,382
1,424 1,4151,450
1,505 1,520
5,052
5,423
5,890
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
40.5%43.1%
39.3% 40.0%42.8% 42.8%
46.0%
39.3%41.4% 40.8%
35.3%
Non-interest income (S$m)
Non-interest income /
Total income
Non-interest incomeFY18 non-interest income 7% lower YoY, driven by a S$406m decline in net gains from
investment securities and other income, as the prior year included substantial gains
from GEH’s divestment of investments
11
Non-interest income
Net fees &
commissions
Dividends & rental
income
Trading income
Net gains from
investment securities
and others
Life & General
Insurance
Note: Figures for 2017 periods were restated in accordance with SFRS(I) and change in accounting policy for GEH.
Figures for FY16 were not restated.
1,638 1,953 2,031
192
159207529
515508429
560 154
649
918
911
481 492 488 491 536 518 502 474
36 47 45 3239 54 80
35
158 140 118 9994
192 213
9
91 9494
282
43
2619
65
84
233 290
310
206
234 225
247
3,437
4,105
3,811
850
1,0061,035
1,214
918
1,024 1,039
830
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Wealth Management Income1/ 2/ (S$m)
Great Eastern’s Embedded Value3/ (S$m)
Bank of Singapore’s Earning Asset Base (US$b)
Wealth Management (“WM”)FY18 WM income down YoY, mainly from lower insurance contributions; Excluding
insurance, WM income grew 7%; BOS’ AUM rose YoY to US$102b
12
As % of Group income
AUMLoans
10,436 11,001 11,694 13,389 13,440
Dec 14 Dec 15 Dec 16 Dec 17 Dec 18
1/ Wealth management income comprises the consolidated income from insurance, asset management, stockbroking and private
banking subsidiaries, plus the Group's income from the sales of unit trusts, bancassurance products, structured deposits and
other treasury products to consumer customers.
2/ Figures for 2017 periods were restated in accordance with SFRS(I) and change in accounting policy for GEH. Figures for FY16
were not restated.
3/ An actuarial embedded value is a commonly used technique to estimate the economic value of the existing business of a life
insurance company.
51 55 79
99 102 14 13
1822 23
65 68
97
121 125
Dec 14 Dec 15 Dec 16 Dec 17 Dec 18
Wealth management
Dec 14 – Dec 18
CAGR 18%
Dec 14 – Dec 18
CAGR 7%
27%
33%29% 28%
32% 33%
38%
31% 31% 29%26%
2,273
3,136
2,842
597
741792
1,006
727761 748
607
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
19.3% 20.5% 20.9% 22.7% 20.9% 20.2% 18.6%23.0% 21.0% 19.8% 20.2%
13
Net fees and commissions
(S$m) 4/
1/ Figures for 2017 periods were restated in accordance with SFRS(I) and change in accounting policy for
GEH. Figures for FY16 were not restated.
2/ Mainly comprising income from private banking, and sales of unit trusts, bancassurance products,
structured deposits and other treasury products to consumer customers.
3/ “Others” includes credit card fees, service charges and other fee and commission income.
4/ Net of fee and commission expenses
Net Fees & CommissionsFY18 net fee income grew 4% YoY to S$2.03b, driven by an increase in wealth
management, loan and trade-related fees. 4Q18 net fee income fell QoQ primarily due to
lower wealth management fees as a result of subdued investment sentiments
Net fee income / Total
income 1/
Non-interest income
Wealth Management 2/
Brokerage & Fund
Management
Loan, Trade &
Guarantees
Investment Banking
Others 3/
588
852 889
164
180 180533
52855763
94 95
290
299 310
215 215 205 216256
223 217 193
43 44 47 46
5445 40
41
123 137 137 131
130140 148
138
29 24 15 26
2231 19
23
71 72 84 72
74 79
78 79
1,638
1,9532,031
481 492 488 491
536518
502474
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
44.6%42.4% 43.4%
45.9%42.2% 41.4% 40.8%
44.2%41.9% 42.0%
45.9%
Operating expenses FY18 expenses rose 4% YoY to S$4.21b. While 4Q18 expenses were tightly controlled
and only up 1% QoQ and flat YoY, CIR was higher mainly from a fall in trading income
led by unrealised MTM losses from GEH’s investment portfolio
14
Operating expenses
(S$m)
Cost-to-income ratio
(“CIR”)
Operating expenses
Headcount (period end) 29,705 29,207 29,161 29,174 29,444 29,612 29,719 29,706
Staff costs
Property &
equipment
Others
2,347 2,471 2,606
763793
812
678779
796
602 619 608 642 662 633 651 660
192 195 195210 194 202 200 216
179 179 198223 176 200 218 202
3,788
4,0434,214
973 993 1,001
1,0751,032 1,035
1,069 1,078
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Note: Figures for 2017 periods were restated in accordance with SFRS(I) and change in accounting policy for GEH.
Figures for FY16 were not restated.
1,212 1,232 1,269 1,221
1,130 1,115 1,0551,014
353 453 474 534
2,6952,800 2,798 2,769
Mar 18 Jun 18 Sep 18 Dec 18
Allowances
Total cumulative allowancesTotal allowances set aside complied with requirements set out in SFRS(I) 9 and the
revised MAS 612
1/ Credit loss allowances for assets classified under stages 1 and 2 relate to non-impaired assets.
2/ Minimum regulatory loss allowance of 1% on non-credit impaired non-bank exposures net of eligible collaterals.
With effect from 1 January 2018,
SFRS(I) 9 requires the Group to
calculate credit loss allowances using
a forward-looking expected credit loss
(“ECL”) model. The difference
between the Stage 1 and 2 ECL1/ and
MAS 612 Minimum Regulatory Loss
Allowance (“MRLA”) 2/ is reported as
Regulatory Loss Allowance Reserve
(“RLAR”).
15
Total cumulative allowances
(S$m)
RLAR
Allowances for non-impaired assets 1/
Allowances for impaired assets
726671
288168 169 156
178
12 2149
205
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Allowances for loans and other
assets (S$m)
1/ Referred to as specific allowances for periods prior to 1Q18.
2/ Referred to as portfolio allowances for periods prior to 1Q18.
3/ Write-backs of allowances for existing NPLs due to settlements and repayments.
4/ Recoveries of loans that had been written off.
5/ Figures are computed on an annualised basis.
6/ Total loan allowances include allowances for impaired and non-impaired loans.
AllowancesFY18 allowances amounted to S$288m; Total credit costs at 11bps
Allowances for impaired loans 23 62 14 20 19 24 178 2 5 14 34
Total loan allowances 6/ 31 27 11 27 29 24 28 4 3 8 27
As a % of avg. loans (bps) 5/
Allowances
Allowances for impaired loans 1/ 484 1,407 397 108 105 138 1,055 13 33 101 250
- Allowances for new & existing NPLs 666 1,632 618 149 173 192 1,117 60 99 157 302
- Write-backs 3/ (126) (161) (155) (31) (53) (32) (45) (33) (45) (40) (37)
- Recoveries 4/ (56) (64) (66) (10) (15) (22) (17) (14) (21) (16) (15)
Allowances for impaired other assets 70 50 5 21 5 15 10 (2) 9 (2) (0)
Allowances for non-impaired loans 2/ 172 (786) (90) 39 59 3 (887) 16 (14) (45) (47)
Allowances for non-impaired other assets
– – (24) – – – – (15) (7) (5) 2
Allowances for loans and other assets 726 671 288 168 169 156 178 12 21 49 205
Allowances for loans and other assets (S$m)
+14% YoY
16
+311% QoQ
-57% YoY
Customer loansLoans rose 9% YoY to S$258b across all key markets
Customer loans (S$b)
Loans
Note: Customer loans by geography are based on where the credit risks reside, which may be different from
the borrower’s country of residence or the booking location of the loans.
17
+9% YoY
flat QoQ
In constant ccy terms
+8% YoY
+1% QoQ
96 96 98 100 104 104 106 108
28 28 28 28 29 30 30 3019 20 19 19 19 20 20 20
54 56 57 5963 65 66 64
28 29 30 3132 33 35 36225 229 232 237
247252 257 258
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
Rest of the world
YoY: +16%
QoQ: +3%
Greater China
YoY: +9%
QoQ: -2%
Indonesia
YoY: +2%
QoQ: -2%
Malaysia
YoY: +5%
QoQ: -1%
Singapore
YoY: +8%
QoQ: +2%
27%
15%
16%
12%
12%
5%
13% 25%
21%
9%
12%
13%
6%
14%Housing loans
FIs, investment & holding cos
Professionals & individuals
General commerce
Others
Manufacturing
Building & construction
42%
12%8%
5%8%
Singapore
MalaysiaIndonesia
Greater China
Other Asia Pacific
Rest of the World
42%
11%8%
25%
5%
9%
25%
Customer loans Loan portfolio remained well-diversified
18
Customer Loans by IndustryCustomer Loans by Geography
S$258b
Dec 18
Note: Customer loans by geography are based on where the credit risks reside, which may be different from
the borrower’s country of residence or the booking location of the loans.
1/ Comprising the “Transport, storage & communication”, “Agriculture, mining & quarrying” and “Others”
industry groupings.
2/ Mainly comprises investment holding, finance, insurance and securities companies. From Sep 18, exposure
to investment and other holding companies were recategorised to the underlying industries.
Loans
Dec 17
S$258b
Dec 18
Dec 17
1/
2/
6 6 6 5 5 6 5 5
14 14 15 18 20 21 22 20
28 30 3130
3232 33
33
22
2 2
22 3
3
4 4
3 4
4 4 4
4
5456 57
5963
65 6664
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
19
Note: Customer loans to Greater China is based on where the credit risks reside, which may be different from
the borrower’s country of residence or the booking location of the loans.
1/ Relates to loans that are booked in China, where credit risks reside.
2/ Relates to loans that are booked outside of China, but with credit risks traced to China.
China 1/
Offshore 2/
Hong Kong
Taiwan
Macau
Greater China Customer Loans Loans grew 9% YoY to S$64b; NPL ratio at 0.4%
Customer loans to
Greater China (S$b)
NPL ratio
Loans
0.6% 0.6% 0.5% 0.4% 0.4% 0.3% 0.3% 0.4%
924 828 9131,086 984 909
1,1531,456
584 717 700
857854
822
783
803621 626677
588636 745
772
618
307 323304
232 247 222
199
261
374 365334
652 684 773626
700
60 61 55
53 47 43 61
100
2,870 2,9202,983
3,468 3,452 3,5143,594
3,938
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
Asset qualityPortfolio quality sound, with NPL ratio stable YoY at 1.5%
Note: NPAs comprise NPLs and classified debt securities/contingent liabilities. NPAs by geography are based
on where the credit risks reside, which may be different from the borrower’s country of residence or the
booking location of the exposures.
1/ In Sep 18, there was a rebooking of NPLs from “Rest of the World” to “Singapore”.
Non-performing
assets(“NPAs”)
(S$m)
NPL ratio
Singapore NPLs
Malaysia NPLs
Indonesia NPLs
Debt securities / Contingent liabilities
Greater China NPLs
Rest of the World NPLs
Asset quality
20
1/
1/
1.3% 1.3% 1.3%1.5% 1.4% 1.4% 1.4%
1.5%
NPL Ratio & Non-Performing AssetsNPL ratio relatively unchanged YoY
Non-oil & gas NPL ratio Oil & gas NPL ratio
21
Asset quality
FY18
S$m
FY17
S$m
4Q18S$m
4Q17S$m
3Q18S$m
Opening
balance3,468 2,886 3,594 2,983 3,514
New NPAs 1,721 2,438 881 1,355 338
Net
recoveries/
upgrades
(745) (1,054) (221) (334) (178)
Write-offs (506) (802) (316) (536) (80)
Closing
balance3,938 3,468 3,938 3,468 3,594
NPL ratio NPAs
Note: On-balance sheet oil and gas exposures made up 5% of total customer loans as at 31 December 2018,
largely unchanged QoQ.
0.63% 0.66% 0.63%0.54% 0.53% 0.52% 0.54%
0.62%
0.62% 0.59% 0.63%0.91%
0.85% 0.86% 0.84%
0.87%
1.25% 1.25% 1.26%
1.45%1.38% 1.38% 1.38%
1.49%
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
82 84 84 88 83 86 84 84
50 51 51 52 53 53 52 53
115 108 108118 124 125 128 132
18 22 25
26 29 27 2327265 264 268
284 289 290 287 295
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
S$132b S$135b S$135b S$140b S$136b S$138b S$136b S$137b
Customer depositsCustomer deposits increased 4% YoY; CASA ratio at 46.4%
22
Note: CASA ratio refers to the ratio of current account and savings deposits to total customer deposits.
Customer deposits
(S$b)
CASA ratio
Deposits
Current Account
Savings Deposits
Fixed Deposits
Others
49.9%50.9% 50.5%
49.2%47.1% 47.7% 47.5%
46.4%
83 94
83 95
84 96 85
98 89 101
89 101
90 103
92 105
60
84
60
83
61
84
61
93
61
94
65
92
68
89
67
91 20
22
20
22
20
22
21
22
21
24
21
23
21
23
21
23
30
26
31
26
32
26
33
29
34
27
36
28
36
29
35
28
5
8
6
7
5
8
5
8
5
7
5
8
5
8
5
8
7
8
8
8
7
8
8
8
8
9
8
9
8
8
9
9
20
23
21
23
23
24
24
26
29
27
28
29
29
27
30
30
225
265
229
264
232
268
237
284
247
289
252
290
257
287
258
295
LoansDeposits LoansDeposits LoansDeposits LoansDeposits LoansDeposits LoansDeposits LoansDeposits LoansDeposits
RMB 65.8% 73.2% 69.0% 61.3% 74.2% 63.9% 58.5% 58.7%
USD 71.0% 72.0% 72.0% 65.8% 65.6% 70.6% 76.0% 73.9%
SGD 88.2% 87.4% 87.7% 87.5% 88.2% 88.2% 87.5% 87.0%
Loans-to-Deposits RatioGroup LDR declined QoQ to 86.4%
23
Customer loans and customer deposits
(S$b)
SGD
USD
MYR
HKD
RMB
IDR
Others
1/ Group loans-to-deposits ratio (“LDR”) based on net customer loans / customer deposits; LDRs by currency based on gross customer loans / customer deposits.
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
LDRs 1/
Funding
Group
LDR 1/
83.6%85.2% 85.3%
82.5%84.4% 85.9%
88.5%86.4%
Customer deposits79% Bank deposits
2%
Debt issued8%
Capital & reserves11%
Average Liquidity Coverage Ratio & Net Stable Funding RatioCASA by Major Currencies
Funding & LiquidityCustomer deposits accounted for 79% of total funding;
All-currency LCR and NSFR comfortably above regulatory guidelines
24
106% 108% 108% 109%
143% 144% 147%159% 149%
138% 130%
156%
267% 260% 269%254%
230%249%
232%
265%
0.6
1.1
1.6
2.1
2.6
3.1
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
SGD LCR
All-currency LCR
Funding
S$b Dec 18 Dec 17 Sep 18
SGD 69 69 69
USD 35 38 35
MYR 7 6 7
HKD 11 11 11
IDR 3 3 3
NSFR
Note: NSFR computed based on MAS Notice 652 effective 1 January 2018. Singapore dollar and all-currency LCRs and NSFR were higher as compared to the regulatory requirements effective at each reporting date.
Funding Composition as of 31 Dec 2018 Wholesale Funding by Currency as of 31 Dec 2018
Total
funding:
S$375b
By Maturity:
≤ 1 year 68%
> 1 year 32%
Total debt
issued:
S$30b
Others
7%
Current account
& savings deposits
37%
Fixed deposits
35%
USD66%
GBP4%
AUD7%
EUR15%
Others8%
25
1/ With full effect from 1 January 2018, capital ratios are computed based on Basel III rules. Capital ratios
before 1 January 2018 were computed based on Basel III transitional arrangements.
2/ Proforma CET1 CAR were computed based on Basel III rules effective from 1 January 2018.
Capital adequacy ratios (“CAR”) (%)
Total CAR
Common Equity Tier 1 (“CET1”) CAR
CET1 capital (S$m) 27,688 27,800 27,807 26,907 26,206 26,641 27,377 28,068
Tier 1 capital (S$m) 29,558 29,684 29,694 28,960 28,277 28,714 28,948 29,640
Total capital (S$m) 34,295 34,384 34,250 33,225 31,440 32,075 32,300 32,986
CapitalCET1 CAR improved QoQ and YoY to 14.0%
Proforma CET1 CAR 2/
Leverage ratio (%) 7.7 7.8 7.6 7.3 7.0 7.0 7.1 7.2
Tier 1 CAR
Capital
Basel III transitional arrangements 1/ Basel III 1/
16.5 16.1 16.217.2
15.8 15.9 16.1 16.4
14.2 13.9 14.014.9
14.2 14.3 14.4 14.8
13.3 13.0 13.113.9
13.1 13.213.6 14.0
12.2 12.0 12.013.1
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
RWA (S$m) 207,224 212,527 211,372 193,082 198,817 200,786 200,322 200,248
42%39% 38%
43%37%
40%
DividendsProposed final dividend increased to 23 cents per share
26
17.0 18.0 18.0 18.0 18.0 20.0
17.018.0 18.0 18.0 19.0
23.0
34.036.0 36.0 36.0 37.0
43.0
2013 2014 2015 2016 2017 2018
Final net dividend
Interim net dividend
Net DPS (cents)
Dividend payout ratio
Dividends
Net Dividends (S$m) 1,168 1,347 1,470 1,507 1,550 1,816
Core Net Profit (S$m) 1/ 2,768 3,451 3,903 3,473 4,146 4,492
1/ SFRS(I) and change in accounting policy for GEH were applied w.e.f. 1 January 2018.
Figures prior to 2018 were not restated.
Agenda
27
Results Overview
FY18 & 4Q18 Group Performance Trends
Appendix: Performance of Major Subsidiaries
- Great Eastern Holdings
- OCBC Wing Hang
- OCBC Malaysia
- Bank OCBC NISP
S$1,313mS$1,235mTWNS
1/ Figures for FY17 were restated in accordance with SFRS(I) and change in accounting policy for GEH.
Note: - “ppt” denotes percentage points.
- OCBC Malaysia’s financials in this presentation comprise the results of OCBC Bank (Malaysia) Berhad and its subsidiary companies.
Subsidiaries’ PerformanceMajor subsidiaries contributed 34% to the Group’s profit
Major subsidiaries
-29%
-6%
-3%
+1.3ppt
Great Eastern
Holdings
41.4%42.7%NBEV margin
S$543mS$528mNBEV
Key Metrics YoYFY18 FY17
28
1/
Bank OCBC NISP
OCBC Malaysia
S$1,037mS$741mNet profit
+21%
+11%
+11%
IDR2,176bIDR2,638bNet profit
IDR106tIDR118tLoans
IDR113tIDR126tDeposits
-14%
+2%
+3%
RM949mRM814mNet profit
RM68bRM69bLoans
RM74bRM76bDeposits
OCBC Wing Hang
+15%
+8%
flat
HKD2,408mHKD2,762mNet profit
HKD179bHKD193bLoans
HKD222bHKD222bDeposits
29
FY18 Great Eastern Holdings’ performanceNet profit contribution at S$604m
Note: Figures for FY17 were restated in accordance with SFRS(I) and change in accounting policy for GEH. For comparison in constant currency terms, operating profit in foreign currencies for 2018 were translated using the corresponding monthly spot rate in 2017. In applying constant currency translation, the impact to Operating Profit figures has been included in Non-Operating Profit.
1/ Operating Profit (net of tax) is defined as premiums less claims, surrenders, commissions, expenses and changes in reserves, plus investment income (dividends, coupons, etc).
2/ Non-operating profit / loss (net of tax) mainly comprises changes in the fair value of assets and liabilities, realised gains / losses on sale of investments, changes in liability discount rates and other non-recurring items.
3/ Primarily from adjustments made to amortisation for intangibles and non-controlling interests.
Great Eastern
GEHFY18S$m
FY17S$m
YoY+/(-)%
Profit from insurance business 761 797 (5)
- Operating profit 1/ 625 600 4
- Non-operating profit 2/ 49 113 (57)
- Others 87 84 4
Profit from Shareholders’ Fund 91 412 (78)
Profit from operations 852 1,209 (30)
Write-back / (Allowances) 5 (17) (130)
Tax & NCI (116) (156) (25)
Net profit 741 1,037 (29)
Group adjustments 3/ (137) (174) (22)
Net profit contribution to Group 604 863 (30)
30
4Q18 Great Eastern Holdings’ performanceNet profit contribution lower YoY and QoQ at S$109m
Note: Figures for 4Q17 were restated in accordance with SFRS(I) and change in accounting policy for GEH. For comparison in constant currency terms, operating profit in foreign currencies for 2018 were translated using the corresponding monthly spot rate in 2017. In applying constant currency translation, the impact to Operating Profit figures has been included in Non-Operating Profit.
1/ Operating Profit (net of tax) is defined as premiums less claims, surrenders, commissions, expenses and changes in reserves, plus investment income (dividends, coupons, etc).
2/ Non-operating profit / loss (net of tax) mainly comprises changes in the fair value of assets and liabilities, realised gains / losses on sale of investments, changes in liability discount rates and other non-recurring items.
3/ Primarily from adjustments made to amortisation for intangibles and non-controlling interests.
Great Eastern
GEH4Q18S$m
4Q17S$m
YoY+/(-)%
3Q18S$m
QoQ+/(-)%
Profit from insurance business 204 278 (26) 183 12
- Operating profit 1/ 172 163 5 141 21
- Non-operating profit 2/ 11 84 (86) 24 (51)
- Others 21 31 (30) 18 16
Profit from Shareholders’ Fund (55) 219 (125) 66 (184)
Profit from operations 149 497 (70) 249 (40)
Write-back / (Allowances) 0 (3) (117) 2 (79)
Tax & NCI (12) (67) (81) (38) (66)
Net profit 137 427 (68) 213 (36)
Group adjustments 3/ (28) (64) (56) (37) (25)
Net profit contribution to Group 109 363 (70) 176 (38)
Note: - Operating Profit (net of tax) is defined as premiums less claims, surrenders, commissions, expenses and
changes in reserves, plus investment income (dividends, coupons, etc). - Figures for 2017 periods were restated in accordance with SFRS(I) and change in accounting policy for GEH.
Figures for FY16 were not restated.- For comparison in constant currency terms, operating profit in foreign currencies for 2018 were translated using
the corresponding monthly spot rate in 2017. Operating profit and non-operating profit in foreign currencies for FY16 were translated using exchange rates as at 31 December 2017. In applying constant currency translation, the impact to Operating Profit figures has been included in Non-Operating Profit. 31
GEH: Operating ProfitFY18 operating profit from insurance business rose 4% YoY, largely driven by insurance
business growth in Malaysia
Great Eastern
502
600625
121
158 158163 159
153
141
172
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Operating profit from insurance business
(S$m)
+5% YoY+4% YoY
GEH: Non-operating profit FY18 non-operating profit of S$49m was led by favourable interest rates movement and
the narrowing of swap spreads. Comparatively, better performance was achieved in FY17
as financial market conditions were stronger then
Note: - Non-operating profit / loss (net of tax) mainly comprises changes in the fair value of assets and liabilities,
realised gains / losses on sale of investments, changes in liability discount rates and other non-recurring items.- Figures for 2017 periods were restated in accordance with SFRS(I) and change in accounting policy for GEH.
Figures for FY16 were not restated. - For comparison in constant currency terms, operating profit in foreign currencies for 2018 were translated using
the corresponding monthly spot rate in 2017. Operating profit and non-operating profit in foreign currencies for FY16 were translated using exchange rates as at 31 December 2017. In applying constant currency translation, the impact to Operating Profit figures has been included in Non-Operating Profit.
(46)
113
49
(82)
27
85 84
(5)
19 24 11
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Non-operating profit/(loss)
from insurance business
(S$m)
Great Eastern
32
691
940842
371
353
369 15
19
24
203167
226
344
154
230256
202
73
84
75
121
70
9186
1215
5
5
5
7
64
7
1,078
1,313
1,235
280256
306
471
231
327347
330
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
TWNS (S$m)
Singapore
Emerging markets
Malaysia
GEH: Total weighted new sales FY18 TWNS fell 6% YoY to S$1.24b. TWNS rose in Malaysia, while agency and
bancassurance sales in Singapore declined
-30% YoY
Note: For comparison in constant currency terms, TWNS in foreign currencies for 2018 were translated
using the corresponding monthly spot rate in 2017.
1/ TWNS in foreign currencies for FY16 were translated using exchange rates as at 31 December 2017.
TWNS for FY16 included sales from Group’s investment in Vietnam up to June 2016.
Great Eastern
1/
33
-6% YoY
43.6% 41.4% 42.7% 39.6%
50.3%
40.8%37.9%
43.6% 42.7%34.8%
50.4%
GEH: New business embedded valueFY18 NBEV declined by 3% to S$528m; NBEV margin rose to 42.7% from 41.4% a year
ago from a shift in product mix
NBEV (S$m)
NBEV margin
(NBEV / Total weighted
new sales)
Note: For comparison in constant currency terms, NBEV in foreign currencies for 2018 have been translated using the corresponding monthly spot rate in 2017. NBEV figures for periods prior to 4Q17 have been restated to take into account revised actuarial assumptions implemented in 4Q17.
1/ NBEV in foreign currencies for FY16 were translated using exchange rates as at 31 December 2017. NBEV for FY16 included NBEV from Group’s investment in Vietnam up to June 2016.
Great Eastern
307 327266
157
210
254
5
68
6777 76
108
5776
6271
43
50 48
69
42
61
57
941
2 2
2
2
2
2
2470
543528
111
129 125
179
101
140
121
167
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
1/
Singapore
Emerging markets
Malaysia
34
FY18 OCBC Wing Hang’s performanceNet profit rose 15% YoY to a new high of HKD2.76b
35
OCBC Wing Hang
OCBC Wing HangFY18
HKD m
FY17HKD m
YoY+/(-)%
Net interest income 4,772 4,254 12
Non-interest income 1,774 1,403 26
Total income 6,546 5,657 16
Operating expenses (3,071) (2,963) 4
Operating profit 3,475 2,693 29
(Allowances) / write-back (245) 28 976
Associates & gains on subordinated liabilities 57 109 (48)
Profit before tax 3,287 2,830 16
Tax (525) (423) 24
Net profit – local reporting 2,762 2,408 15
Key ratios (%)
Cost-to-income 46.9 52.4
4Q18 OCBC Wing Hang’s performanceNet profit grew 23% YoY to HKD715m
36
OCBC Wing Hang
OCBC Wing Hang4Q18HKD m
4Q17HKD m
YoY+/(-)%
3Q18HKD m
QoQ+/(-)%
Net interest income 1,181 1,160 2 1,205 (2)
Non-interest income 543 248 118 536 1
Total income 1,724 1,408 22 1,741 (1)
Operating expenses (766) (779) (2) (786) (3)
Operating profit 958 629 52 955
(Allowances)/ write-back (167) 43 491 (81) 105
Associates 3 17 (82) 5 (43)
Profit before tax 794 689 15 879 (10)
Tax (79) (107) (25) (166) (52)
Net profit – local reporting 715 582 23 713
Key ratios (%)
Cost-to-income 44.5 55.3 45.2
601
OCBC Wing Hang: RevenueFY18 net interest income rose 12% YoY and NIM increased 3bps to 1.60%; Non-interest
income up 26% YoY
37
OCBC Wing Hang
1/ FY17 and 3Q17 included higher net gains from sale of investment securities.
275
314
566
248 232
463
536 543
1,228
1,403
1,774
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
1.67%1.57% 1.60% 1.56% 1.58% 1.54% 1.60% 1.61% 1.56% 1.61% 1.61%
3,794
4,254
4,772
970 1,021
1,103 1,160
1,210 1,177 1,205 1,181
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Non-interest income (HKD m)
24.4%24.8%27.1% 22.1%23.5%33.9%
17.6%16.1%28.2%30.8%31.5%
Net interest income (HKD m)
Net interest margin
Non-int. income/ Total income
1/
1/
194 197 205
222 219 217 222 222
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
0.8% 0.9% 0.8%0.5% 0.5% 0.4% 0.4% 0.6%
72.3% 71.7% 71.8% 70.3%74.8% 74.8% 74.1% 73.9%
NPL ratio
Gross Loans (HKD b) Deposits (HKD b)
CASA Ratio
35.9% 37.5% 36.7% 38.0% 37.4% 36.6% 37.9% 38.0%
1/ LDR calculation based on Hong Kong Monetary Authority’s guidelines.
OCBC Wing Hang: Loans & DepositsLoans increased 8% YoY to HKD193b, with deposits stable at HKD222b; NPL ratio at
0.6%
38
OCBC Wing Hang
Loans / Deposits 1/
164 166 172
179
190 190 192 193
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
OCBC MalaysiaFY18RM m
FY17RM m
YoY+/(-)%
Net interest income 1,506 1,405 7
Islamic banking income 1/ 436 450 (3)
Non-interest / finance income 520 607 (14)
Total income 2,462 2,462
Operating expenses (1,146) (1,094) 5
Operating profit 1,316 1,368 (4)
Allowances (219) (94) 133
Profit before tax 1,097 1,274 (14)
Tax (283) (325) (13)
Net profit – local reporting 814 949 (14)
Key ratios (%)
Cost-to-income 46.5 44.4
CAR 2/
- Common Equity Tier 1 13.5 13.7
- Tier 1 15.0 15.6
- Total CAR 17.6 18.3
FY18 OCBC Malaysia’s PerformanceNet profit for the year at RM814m
39
1/ Islamic banking income comprises net finance income and other income contributed by Islamic banking
subsidiary OCBC Al-Amin.
2/ Capital ratios for OCBC Malaysia Group are computed in accordance with the Capital Adequacy Framework
issued by Bank Negara Malaysia.
OCBC Malaysia
4Q18 OCBC Malaysia’s Performance Net profit rose 9% QoQ to RM189m
40
OCBC Malaysia4Q18RM m
4Q17RM m
YoY+/(-)%
3Q18RM m
QoQ+/(-)%
Net interest income 382 359 6 390 (2)
Islamic banking income 1/ 109 116 (6) 107 2
Non-interest / finance income 76 187 (59) 156 (51)
Total income 567 662 (14) 653 (13)
Operating expenses (287) (274) 5 (289) (1)
Operating profit 280 388 (28) 364 (23)
Allowances (44) (62) (29) (103) (57)
Profit before tax 236 326 (28) 261 (10)
Tax (47) (85) (45) (87) (46)
Net profit – local reporting 189 241 (22) 174 9
Key ratios (%)
Cost-to-income 50.6 41.3 44.3
CAR 2/
- CET 1 13.5 13.7 12.9
- Tier 1 15.0 15.6 14.4
- Total CAR 17.6 18.3 17.1
1/ Islamic banking income comprises net finance income and other income contributed by Islamic banking
subsidiary OCBC Al-Amin.
2/ Capital ratios for OCBC Malaysia Group are computed in accordance with the Capital Adequacy
Framework issued by Bank Negara Malaysia.
OCBC Malaysia
128
164
128
187
151137
156
76
12
19
13
26
1722
12
11
560607
520
35
70
62
140
183
141
213
168159
168
87
595
677
582
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
25.4% 27.5%23.6% 24.0%
29.4%23.9%
32.1% 27.3% 25.3% 25.7%
15.2%
346 345 355 359 359 375 390 382
99 96 95 90 8893
95 98
1,3091,405
1,506
435380
374445 441 450 449 447
468485 480
1,744 1,7851,880
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
OCBC Malaysia: RevenueFY18 net interest/finance income grew 5% YoY to RM1.88b; NIM increased 12bps to
2.07%
41
Net interest/finance income (RM m) Non-interest/finance income1/ (RM m)
IslamicConventional
1/ Non-interest/finance income comprises net fee and commission income, net trading income and other
operating income.
Non-interest/finance income/ Total income
IslamicConventional
Note: Based on Bank Negara Malaysia’s guidelines and Malaysian Financial Reporting Standards.
OCBC Malaysia
Net interest/ finance margin
1.91%1.95%2.07% 1.96%1.92%1.93%1.98%2.03%2.10%2.11%2.04%
94.2% 92.4% 92.7% 94.2%
88.9%93.3% 94.1%
92.1%2.1%2.3% 2.3%
2.1% 2.2%2.0%
1.8% 1.9%
42
NPL Ratio Loans / Deposits
Gross Loans (RM b) Deposits (RM b)
Note: Based on Bank Negara Malaysia’s guidelines and Malaysian Financial Reporting Standards.
71 69 69 68 67 68 69 69
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
OCBC Malaysia: Loans & DepositsGross loans up 2% YoY at RM69b; NPL ratio at 1.9%; Deposits grew 3% YoY to RM76b
and CASA ratio improved to 32.5%
71 71 72 74 7573 74
76
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
CASA Ratio
32.6% 32.9% 30.5% 30.4% 29.2% 31.2% 32.7% 32.5%
OCBC Malaysia
Bank OCBC NISPFY18IDR b
FY17IDR b
YoY+/(-)%
Net interest income 6,378 6,039 6
Non-interest income 1,411 1,513 (7)
Total income 7,789 7,552 3
Operating expenses (3,513) (3,363) 4
Operating profit 4,276 4,189 2
Allowances (790) (1,311) (40)
Non-operating income 0 0 nm
Profit before tax 3,486 2,878 21
Tax (848) (702) 21
Net profit – local reporting 2,638 2,176 21
Key ratios (%)
Cost-to-income 45.1 44.5
CAR
- CET 1 16.6 16.6
- Tier 1 16.6 16.6
- Total CAR 17.6 17.5
FY18 Bank OCBC NISP’s performanceNet profit rose 21% YoY to a record IDR2.64t
43
Bank OCBC NISP
Note: Capital ratios are computed based on guidelines from Financial Services Authority in Indonesia.
4Q18 Bank OCBC NISP’s performanceNet profit increased 19% YoY but lower QoQ at IDR605b
44
Bank OCBC NISP 4Q18IDR b
4Q17IDR b
YoY+/(-)%
3Q18IDR b
QoQ+/(-)%
Net interest income 1,603 1,574 2 1,628 (2)
Non-interest income 440 367 20 391 13
Total income 2,043 1,941 5 2,019 1
Operating expenses (887) (886) (875) 1
Operating profit 1,156 1,055 10 1,144 1
Allowances (356) (387) (8) (222) 61
Non-operating income (2) 0 nm 1 nm
Profit before tax 798 668 19 923 (14)
Tax (193) (161) 20 (225) (14)
Net profit – local reporting 605 507 19 698 (13)
Key ratios (%)
Cost-to-income 43.4 45.6 43.3
CAR
- CET 1 16.6 16.6 16.1
- Tier 1 16.6 16.6 16.1
- Total CAR 17.6 17.5 17.0
Note: Capital ratios are computed based on guidelines from Financial Services Authority in Indonesia.
Bank OCBC NISP
4.62%4.47%4.15% 4.31%
4.67%4.48%4.41%4.24%4.08%4.26%4.05% 20.8%20.0%18.1% 19.5%
21.8%19.9%18.9%19.9%
10.9%
19.3%21.6%
Bank OCBC NISP: RevenueFY18 net interest income rose 6% to IDR6.38t; NIM at 4.15%
45
Net interest income (IDR b) Non-interest income (IDR b)
Note: NIM and Non-interest Income/Total Income ratio calculation based on guidelines from Financial Services
Authority in Indonesia.
5,393
6,0396,378
1,413
1,515 1,537 1,574 1,551 1,596 1,628 1,603
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Net interest margin
Non-int. income/ Total income
1,4161,513
1,411 341
422
383367
386
194
391
440
FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Bank OCBC NISP
CASA Ratio
39.2% 43.5% 39.8% 38.5% 34.9% 36.6% 37.8% 36.5%
1.9% 1.9% 1.9% 1.8% 1.7% 1.8% 1.8% 1.7%
46
NPL Ratio Loans / Deposits
Deposits (IDR t)
Bank OCBC NISP: Loans & DepositsLoans and deposits both grew 11% YoY; NPL ratio lower at 1.7%
Note: Gross loans-to-deposits ratio calculation based on guidelines from Financial Services Authority
in Indonesia.
94101 103 106
111117 120 118
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
85.9%94.3%
89.8%93.4% 91.1%
96.7%100.9%
93.5%
110106
115 113121 121 118
126
Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18
Gross Loans (IDR t)
Bank OCBC NISP
2018 Full Year Results
Thank You